Midday Musings: Just Waiting on the Call

SAN FRANCISCO -- The Conference Board's index of leading economic indicators rose by 1.2% last month, its biggest rise since February 1996 and well in excess of the 0.8% climb forecast by economists.

Perhaps more importantly, the leading index has now risen for three consecutive months while the coincident index rose for the first time in five months. "This, coupled with a robust leading index, indicates that the economy, barring any unexpected shock, is gathering momentum," the Conference Board said in its press release .

On Friday, the Economic Cycle Research Institute (ECRI) said its Weekly Leading Index slipped to 120.3 in the week ended Jan. 11 from 120.6 the previous week.

Nevertheless, the ECRI's Anirvan Banerji commented that the index's rising trend over the past three months is paramount and suggests the recession is likely over.

"We will probably make our recovery call soon," Banerji said in the ECRI's press release. He also dismissed the possibility of a double-dip scenario recently raised by Morgan Stanley's Steven Roach.

Meanwhile, Nobel Prize-winning economist Milton Friedman opined in today's Wall Street Journal on why he believes the current post-bubble cycle will not prove to be as daunting as those cycles that occurred in the U.S. in the 1930s and Japan in the 1990s.

Because the Federal Reserve has learned from the mistakes made by policymakers in those prior episodes, there is "reason to believe that the current recession will be mild and that expansion will soon resume," Friedman wrote.

Given that macroeconomic backdrop, you might expect stocks to be roaring higher this morning. Instead, major averages were stuck in their recent malaise at midday.

The market's gangbuster rally from late September until early January correctly anticipated an economic rebound that now appears imminent if not already at hand. But those who believe in the stock market's prognosticating abilities must now ask if the major averages' more recent struggles are an indication of how the recovery will unfold.

Speaking of which: To long-suffering fans of the New England Patriots, especially those who braved the elements at Foxborough, I salute you. To less-long-but-still-suffering fans of the Oakland Raiders, I suggest you call 911, because you got robbed.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to Aaron L. Task.